Leveraging Ideas and Capital to Power the Future of Health Care

Insight How one Canadian venture capital firm is driving health care innovation.

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Peter van der Velden

Managing General Partner, Lumira Ventures

Over the past 20 years, there has been a seismic shift in the way innovation in Canada’s biotech and life sciences sector is positioned and funded. It used to be that the research and development departments within large pharmaceutical and medical technology companies were the source of future health care innovations, but according to Peter van der Velden, Managing General Partner at Lumira Ventures, that has largely changed over the past 20 years.

“Today, almost 70 percent of innovative new products approved by the United States Food and Drug Administration originated outside of the big players, with many having had their origins in entrepreneurial start-ups, often funded by venture capitalists,” he says. “Years ago, there were no health care venture capital firms. This has been the real transition. Innovation is now being funded and driven by companies like ours and entrepreneurs with great ideas.”

Lumira Ventures is the largest and most active player in the Canadian ecosystem. In fact, access to capital for health care innovation in Canada is often difficult to come by. “In the vast majority of cases where Lumira is the lead investor, much of the rest of the capital required to support these companies comes from foreign investors that Lumira brings into the investment syndicate,” van der Velden says.

This changing model is good for the biotech sector and society because there is a more efficient use of human and capital resources and a more diverse approach to the product which allows health care challenges to be better addressed. “Instead of hundreds of products being developed, it’s thousands which result in better health outcomes,” he says. “It’s led to more creativity and courage to try new things in the sector.”

Peter van der Velden: Our strategy is based on innovation but we also look for passionate, experienced management teams in regions that traditionally haven’t seen a lot of venture capital funding. We easily recognize the best-in-class ideas and technologies, and fund them with our capital and that of our investing partners. We also look for companies providing solutions that achieve transformative outcomes for patients.

MP: Why has your approach been successful?

PLV: We’re nimble and highly-efficient allocators of capital, able to double down on projects that will have the most impact. At the same time, we can quickly unwind a project if we don’t think it will go anywhere. We’re empathetic to the entrepreneurial experience because all of our employees have worked in operations so we know the challenges involved in building something great.

MP: What are some examples of companies you have helped support?

PLV: We supported Victoria-based Aurinia Pharmaceuticals, which is developing a drug that will help treat Lupus patients who develop inflammation of the kidneys. Zymeworks is developing new and transformative treatments for cancer, autoimmune, and inflammatory diseases and enGene, in Montreal, is developing an innovative therapy platform for the delivery of disease-modifying genes and the proteins they produce in pill form.

MP: Philanthropy in the sector is a big part of your strategy. Why is this important?

PLV: We live and breathe the health care space, and decided that we could have a bigger impact if we were more coordinated in donating to charities. As a result, we were the first VC in Canada to donate a percentage of our profits to 12 leading health care foundations across Canada. The money goes toward innovation development and adoption but the relationship has grown, so it’s more than just giving these institutions money — we often interact with and mentor researchers and clinicians who are developing new technologies or forming start-ups. It’s truly a commitment of capital and time.